Exports to China increase as consumers embrace Aussie wine
skip to content1
We are experiencing some issues with the Rabobank Online Savings mobile app which means it is unavailable for some Apple users.

Exports to China increase as consumers embrace Aussie wine

China’s wine market is emerging from its recent state of flux providing great relief to wine businesses that are increasingly invested in “what is now one of the world’s largest wine import markets”, according to a recently-released Rabobank report.

The report, The rise, fall and rise (again) of China’s wine market, was launched last week at an international wine conference Wine Vision in Sonoma, California.

Speaking about the report’s findings, Rabobank senior analyst Marc Soccio said the evolution of the Chinese consumer base was central to its recent turnaround in demand for imported wine.

"With much of the market previously centred around business and government entertainment, we’ve recently seen a significant shift in the way wine is distributed, purchased and consumed in China,” he said.

“There is now a shift towards a younger retail consumer who is looking to engage more intently with the wine category, displaying a thirst for foreign wine culture and education. They are also much more willing to purchase wine for their own personal and social consumption, rather than as a gift, as older generation have done.”

The rise of e-commerce
Fuelled by highly connected shoppers, the growth of e-commerce in China has been impressive the Rabobank report said. This was evidenced by the results of Alibaba's ‘Single’s Day’ promotion on 11 November 2016, where sales across all consumer categories hit USD 17.8 billion, up from USD 14.3 billion in 2015 and USD 9.3 billion the year before.

“While Alibaba is a well-known site, it is just one of a myriad of sites currently vying for the Chinese consumer dollar, providing new opportunities for wine businesses,” Mr Soccio said.

“The average age of subscribers to Alibaba’s business to consumer sales platform, Tmall, is just 27 – making this an important platform to engage with younger consumers. This is just one example of a platform that has been hugely effective at directly connecting wine companies and wholesalers with budding consumers.”

Mr Soccio said on top of providing a “growing route to market”, these sites are also acting as important tools for wine companies to set and signal market prices. While e-commerce is ultimately acting to deliver better pricing and convenience to consumers, he warns managing these platforms is an evolving science that can be challenging for wine companies to navigate.

What this means for wine exporters
According to the report, the recent changes in the market provide more confidence that the current and future growth in the Chinese wine market is being built on stronger foundations.

“Demand appears to be well-supported by the way in which younger and increasingly affluent Chinese consumers are gravitating to wine and wine culture, which is particularly benefiting foreign brands in the market,” Mr Soccio said.

While recent growth appears more reasonably based, Mr Soccio said China is a market that is still very much in transition.

“With the recent evolution of the market, Chinese wine consumers have become much more price-sensitive and value-oriented than in the past, and this has seen bottled wine imports experience a noticeable shift down-market,” he said.

Lower-value offerings have been experiencing higher growth, he said, and this has resulted in suppliers from Spain, Chile and Italy establishing a stronger presence in the market. However, wines from France and Australia continue to play a dominant role, commanding over 55 per cent of volume and 70 per cent of value of still bottled wine imports.

“Australia continues to be a stand-out performer, having forged an enviable position in the Chinese market,” he said.

“Australian wine companies have been spending a great deal of time in the market forging strong trade relationships and building valuable brand awareness and a premium positioning in the market, which has recently resulted in China becoming the ‘number one’ importer of Australian wine, based on value.

“This level of investment in marketing and promotion will be increasingly important in the future, as rising competition and more price sensitive consumers place pressure on pricing and returns in the market.”

Rabobank Australia is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 115 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of approximately 8.6 million clients worldwide through a network of close to 1000 offices and branches. Rabobank Australia is one of the country's leading rural lenders and a significant provider of business and corporate banking and financial services to the Australian food and agribusiness sector. The bank has 61 branches throughout Australia.

Media contacts:

Denise Shaw
Head of Media Relations
Rabobank Australia & New Zealand
Phone: 02 8115 2744 or 0439 603 525
Email: denise.shaw@rabobank.com

Skye Ward
Media Relations Manager
Rabobank Australia & New Zealand
Phone: 02 4855 1111 or 0418 216 103
Email: skye.ward@rabobank.com